Money laundering mechanism

Criminals use money laundering as a means of evading detection and punishment. The main goal is to keep themselves and the proceeds of their criminal activity out of the hands of tax and law enforcement officials. Criminals have had an edge on this front for a long time. They have the means to support their extensive criminal activities and are quick learners. In an effort to hide the sources of their enormous capita, they have learned how to manipulate financial systems and legal business practices. In addition to this, their unlimited resources have enabled them to hire professional accountants, and professional financial advisers who assist them in developing complex structures that make it next to impossible to detect foul play and collecting evidence becomes onerous. They have also learned to work on an international scale to make it even difficult to trace the proceeds of crime.

On the other hand, law enforcement officials and governments around the world have all made tremendous efforts to combat crime. However, their efforts have been met with multiple challenges and downturns. These have made it much more difficult to detect, trace, collect evidence, and prosecute crimes associated with money laundering. To understand the reason behind this it is vital to first analyses the money laundering process and identify the elements that make it so difficult to curb. Firsts, most money laundering operation deal only on cash. For low levels criminals, there is no need to have elaborate money laundering systems. They limit their transaction to cash exchanges be it when dealing with their suppliers and customers, or their living expenses to avoid the detection by financial institutions (Leong, 2016). In the occasions where they use banking institutions, they do so in small amounts that can be handled without raising any suspicion of criminal activities.

Secondly, when dealing with large amounts of money, especially among the so-called “big league” criminals, money laundering is done through layering and integration layering integration. Although cash is used in many economies, a majority of large criminal organizations are forced to devise mechanisms that enable them to do cashless transactions. To achieve this, these organizations scheme money-laundering systems that have the appearance of legitimate businesses (Leong, 2016). What makes it difficult for law enforcement agencies to detect is that any lawful business or financial arrangements can be employed to be used as a money laundering front. The range of possibility is wide which stretches the abilities of law enforcement agencies with limited resources.

In addition to this, with the advent and prevalence of stock market industry, criminal organizations have found an easy way of clean vast amounts of money with minimal suspicion. Moreover, the increased internationalization of financial services industry, and the smooth nature of buying and selling stocks, the opportunity to transfer the proceeds across national and continental borders has immensely expanded (Leong, 2016). With different jurisdictions, investigating, and prosecuting financial crimes becomes even more difficult. It is important to note that for a country to examine money-laundering claims that have to originate from another country, it requires the help and corporation of the said nation and also there need to be a good working relationship between the two sovereignties.

Lastly, it is vital to note that with advancement in technological advancement in both the telecommunication and financial sectors, more avenues are created for money laundering activities. Although these improvements are also felt in the law enforcement circles, organized criminals have unlimited access to funding to enable them to remain one or two steps ahead of the authorities (Leong, 2016). Additionally, investigators, specialists, and prosecutors are trained and specialize in specific techniques. As such, unless they have a compulsory and mutual inter-agency corporation if they would have any chance to fight money-laundering.


Leong, A. V. M. (2016).The Disruption of International Organized Crime: An Analysis of Legal and Non-Legal Strategies. New York, NY: Routledge.

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